Share price rise has Orica on defensive

27 April 2004 — 10:00pm

An ASX "speeding ticket" put a roadblock in front of Orica's week-long share price rally, lowering the shares after the company acknowledged holding private briefings with investors and analysts during its blackout period.

The Melbourne chemical producer's half-year results will not be released until May 3 but the shares rose 10 per cent last week, attracting the Australian Stock Exchange's attention.

In response to the ASX query, company secretary Michaela Healey said Orica "is not aware of any information that has been announced to the ASX which could be an explanation for recent trading in securities".

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But Ms Healey said the company had made recent presentations to international investors in Australia and London and had responded to questions from a Macquarie Equities analyst.

"Orica has not released any information in briefings to analysts or institutions that is not already in the public domain," Ms Healey said. She said strategic issues were discussed at these presentations but no performance issues were mentioned due to the blackout period.

Ms Healey said many international investors toured Australia at this time of year and Orica made presentations now out of convenience to foreigners.

"So many other companies are providing briefings at this time. Our 30 September reporting date is out of whack with the others," she said, referring to the June 30 date many other companies use.

Orica told the ASX there had been increased offshore interest in the shares, even though the company does not offer American depository receipts.

"As there have been limited volumes of Orica shares for sale on market in the last week, the prospective purchaser of the stock has increased the market price for Orica shares in their effort to acquire the number of shares they were seeking," Ms Healey said.

Orica has not released a 2004 profit outlook, but analysts are predicting strong results.

In a research note last week, UBS forecast $1.18 earnings per share and $300 million in net profit, up significantly over last year. "We believe the market is becoming more comfortable that Orica can achieve ongoing earnings growth of 10 per cent . . . and we anticipate further share price gains," the note said.